Foreign Earned Income Deduction

[Philip Lagaris]

Hi there,

This is a question about tax deductions and qualifying income.

Last year I qualified for the foreign-earned income deduction (FEID), a deduction that allows me to deduct about $100k from my taxable income because I was not physically in the United States for that year. I own three rental properties and in the past my lender has told me that the FEID will make it impossible for me to qualify for a conventional loan because it will show my income is too low.

Today I got a new Tax Accountant, who used to work in mortgage lending, and she said the FEID should not lower my qualifying income because it is a deduction (not an expense). She tells me my broker is not an underwriter and may not know the correct answer.

I don't know who to trust!

Does anyone have any experience with the FEID or know whether this should affect my qualifying income?

Thanks!